IDEAS home Printed from https://ideas.repec.org/a/ris/integr/0485.html
   My bibliography  Save this article

The South Asian Free Trade Area: an Analysis of Policy Options for Sri Lanka

Author

Listed:
  • S Perera, M. S.

    (University of Sri Jayewardenepura)

Abstract

South Asia was slow to adopt regional economic cooperation. The South Asian Association for Regional Cooperation (SAARC), established in 1985, and the creation of the South Asian Free Trade Area (SAFTA) remain a widely discussed policy issue in this region. This study compares the impacts of different trade policy options on Sri Lanka using the Global Trading Analysis Project (GTAP) Model. The simulation results indicate that multilateral trade liberalisation is the best trade policy outcome for the Sri Lankan economy. The South Asian Customs Union ranks the next highest in terms of welfare for Sri Lanka, followed in order by the SAFTA and the Indo Lanka Free Trade Agreement (ILFTA). However, the proposed Sri Lanka-Bangladesh FTA did not suggest significant welfare gains to both trading partners. Furthermore, it was determined that the SAFTA can be formed without having significant trade diversion effects. Therefore, of the regional trade policy options considered in the study, Sri Lanka should focus on implementing the SAFTA. In addition, the ILFTA can continue to strengthen the SAFTA. The next stage of the SAFTA is transforming the SAFTA into the South Asian Customs Union, which is already a component of the agreement. However, this trade policy option is to be negotiated. Finally, it appears that the SAFTA still needs to find its linkages to multilateral trade liberalisation.

Suggested Citation

  • S Perera, M. S., 2009. "The South Asian Free Trade Area: an Analysis of Policy Options for Sri Lanka," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 24, pages 530-562.
    • Handle: RePEc:ris:integr:0485
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Andrew Thangasamy, 2019. "The Missing Link in Regional Integration in South Asia: The Case for Regional and Sub-regional Political Institutions," South Asian Survey, , vol. 26(2), pages 139-155, September.
    2. Vipin Sharma & Vinod Kumar, 2021. "Trade potential under the SAFTA between India and other SAARC countries: the augmented gravity model approach," Statistics in Transition New Series, Polish Statistical Association, vol. 22(3), pages 81-97, September.
    3. Sharma Vipin & Kumar Vinod, 2021. "Trade potential under the SAFTA between India and other SAARC countries: the augmented gravity model approach," Statistics in Transition New Series, Statistics Poland, vol. 22(3), pages 81-97, September.

    More about this item

    Keywords

    economic integration; regionalism; bilateralism; multilaterism;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F15 - International Economics - - Trade - - - Economic Integration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:integr:0485. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Yunhoe Kim (email available below). General contact details of provider: https://edirc.repec.org/data/desejkr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.